Global crude oil prices recorded a sharp decline, falling below the $100 per barrel mark after U.S. President Donald Trump announced a temporary ceasefire agreement in the ongoing U.S.-Iran conflict.
The market reacted immediately to the geopolitical de-escalation, with Brent crude dropping by over 13–15% to around $93–$95 per barrel, while U.S. West Texas Intermediate (WTI) crude fell to approximately $94–$97 per barrel.
Reuters Report that the ceasefire, described as a two-week truce, is conditional on the reopening of the strategic Strait of Hormuz, a critical global oil transit route responsible for transporting roughly 20% of the world’s oil supply.
The agreement significantly reduced fears of prolonged supply disruption, which had previously driven oil prices above $100 and close to $120 per barrel during the peak of the conflict in March.
Market analysts note that the sharp price drop reflects a rapid unwinding of the geopolitical risk premium that had been priced into crude oil during weeks of escalating tensions.
The reopening of shipping routes through the Strait of Hormuz is expected to restore supply flows and stabilize global energy markets in the short term.
Despite the decline, prices remain elevated compared to pre-conflict levels, indicating that underlying market uncertainty persists. Analysts warn that volatility may continue, as the sustainability of the ceasefire and long-term diplomatic outcomes remain unclear.
The development triggered broader global market reactions, with equities rallying and energy stocks declining, as investors recalibrated expectations around supply risks and inflation pressures.
The sharp correction underscores the sensitivity of global oil markets to geopolitical developments, particularly in regions controlling critical energy supply routes.
